THE HIGH MARGIN PRECIOUS METALS COMPANY April 2019
CAUTIONARY STATEMENTS CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS The information contained in this Presentation contains “forward -looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward -looking information” within the meaning of Canadian securities legislation. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Readers are strongly cautioned to carefully review the cautionary notes to this Presentation starting on page 57 and in particular: Note 1 at the end of this Presentation contains our cautionary note regarding forward-looking statements and sets out the material assumptions and risk factors that could cause actual results to differ, including, but not limited to, fluctuations in the price of commodities, the absence of control over mining operations from which Wheaton Precious Metal purchases precious metals or cobalt, and risks related to such mining operations, the continued operation of Wheaton Precious Metal’s Counterparties and risks in estimating cash taxes payable in respect of the 2005-2010 taxation years and assessing the impact of the settlement with the CRA for years subsequent to 2010. Readers should also consider the section entitled “Description of the Business – Risk Factors” in Wheaton Precious Metal’s Annual Information Form and the risks identified under “Risks and Uncertainties” in Management's Discussion and Analysis for the period ended December 31, 2018, both available on SEDAR and in Wheaton Precious Metals' Form 40-F year ended Dec 31, 2018. and Wheaton Precious Metals' Form 6-K filed March 20, 2019, both on file with the U.S. Securities and Exchange Commission. Where applicable, readers should also consider any updates to such “Risks and Uncertainties” that may be provided by Wheaton Precious Metals in its quarterly Management’s Discussion and Analysis. Note 2 at the end of this Presentation contains our cautionary note regarding the presentation of mineral reserve and mineral resource estimates. 2
WHO IS WHEATON PRECIOUS METALS
WHEATON PRECIOUS METALS A MODEL DESIGNED TO BENEFIT ALL STAKEHOLDERS Our Vision To be the world’s premier precious metals investment vehicle. Our Mandate To deliver value through streaming to all of our stakeholders: To our Shareholders , To our Partners , To our Neighbours , by delivering low risk, high by crystallizing value for by promoting responsible quality, diversified exposure precious metals yet to mining practices and supporting the communities in which we and growth optionality to be produced live and operate precious metals 4 Who is Wheaton Precious Metals?
HIGH QUALITY ASSET BASE DIVERSIFIED PORTFOLIO OF HIGH QUALITY ASSETS Operating Mines (19) Development Projects (9) Partners: Vale Keno Hill Glencore Zinkgruvan Kutcho Voisey’s Bay Goldcorp 777 Coleman Barrick Victor Aljustrel Copper Cliff Stillwater Creighton Stratoni Lundin East Boulder Garson Neves-Corvo Hudbay Totten Rosemont Peñasquito Sibanye-Stillwater San Dimas Los Filos Pan American First Majestic Toroparu Antamina Eldorado Salobo Capstone Yauliyacu Constancia Cotabambas Alexco Sandspring Pascua-Lama Corporate Offices (2) Panoro Navidad Leagold Kutcho Copper Well-diversified with low political risk 5 Who is Wheaton Precious Metals?
HIGH QUALITY ASSET BASE LOW COST, LONG LIFE PRODUCTION 2019 – 2023 Avg. Forecast Production Mine Life of Operating Portfolio 1,2,3 by Cost Quartile 1,3 70 3% 60 26 50 10% 40 8 30 19% 20 32 68% 10 First Second 0 Third Proven & Measured & Inferred Probable Indicated Mineral Fourth Mineral Mineral Resources Reserves Resources Over two thirds of Wheaton’ s production comes from assets that fall in the lowest cost quartile! And the portfolio has over 30 years of mine life based on reserves 6 Who is Wheaton Precious Metals?
HIGH QUALITY ASSET BASE FIVE YEAR PRODUCTION FORECAST Production Profile 1,4 1,200 Gold Equivalent Production (GEO) Silver Equivalent Production (SEO) 2018 Actual 2019 5-Year Guidance is for annual production to 90 Guidance 2018 Results Guidance average 750Koz Gold Equivalent per year 645koz GEO 688koz GEO 690koz GEO 1,000 80 Development Projects 70 800 22.0Koz 14.7Koz Voisey’s Bay (Co) (Koz) 60 Pd (Moz) Pd Stillwater (Au+Pd) 50 600 Salobo (Au) 373Koz 365Koz Sudbury (Au) 40 Au Au 400 San Dimas (Au) 30 Constancia (Au+Ag) 20 Antamina (Ag) 200 24.5Moz 24.5Moz Peñasquito (Ag) 10 Ag Ag Other (Au+Ag) 0 0 2018E 2018A 2019E 2020E 2021E 2022E 2023E Optionality Silver Gold Palladium Cobalt Optionality Wheaton’s 2018 production significantly outperformed guidance. 7 Who is Wheaton Precious Metals?
CASH OPERATING COSTS PREDICTABLE COSTS AND HIGH MARGINS Total Cash Cost and Cash Operating Margins per Ounce 1,5,6,7 $2,000 Gold Price $1,500 (US$/0z) $1,000 79% 81% 72% 69% 69% 69% 68% 66% 75% 71% $500 $393 $395 $409 $362 $386 $386 $391 $426 $300 $300 $300 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019- 2023E $40 $30 Silver Price (US$/0z) $20 88% 87% 83% 81% 78% 74% 74% $10 70% 73% 74% 74% 71% $5.15 $4.06 $4.06 $4.14 $4.17 $4.42 $4.49 4.69 $3.91 $3.94 $3.97 $3.97 $3.99 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019- 2023E Total Cash Cost/oz Cash Operating Margins 8 Who is Wheaton Precious Metals?
CORPORATE COSTS LOW G&A COSTS REFLECT SCALABILITY OF BUSINESS General and Administrative (“G&A”) Costs per Gold Equivalent Ounce Produced 1,8 $2,000 Equivalent Ounce US$ per Gold $1,500 $1,000 $500 $55.27 $50.19 $40.13 $47.85 $53.56 $60.12 $46.44 $40.89 $52.14 $75.17 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Administrative Costs 9 0.60% 0.50% 0.45% 0.45% 0.40% 0.39% 0.35% 0.40% 0.20% 69% 0.00% Wheaton iShares Silver Sprott Physical SPDR Gold Trust Silver Bullion Gold Bullion Precious Trust (SLV) Silver Trust (PSLV) (GLD) Storage Fee Storage Fee Metals G&A per gold equivalent ounce amongst the lowest in the sector 9 Who is Wheaton Precious Metals?
STRONG TRACK RECORD OF ORGANIC GROWTH EXPLORATION AND INFERRED CONVERSION Reserves and Resources Growth 2,10 8.5Moz GEOs or 687M SEOs 9.7M GEOs 8.7M GEOs (M&I) 12.5M GEOs or 792M SEOs or 706M SEOs or 1,017M SEOs (M&I) 24.8M GEOs or 2,012M SEOs 19.6M GEOs (P&P) or 1,596M SEOs (P&P) Total Acquired Total Mined Total Exploration & R&R Inferred Conversion Exploration and inferred conversion generated more than 8.5M GEOs And significant exploration upside still exists across the stream portfolio! 10 Who is Wheaton Precious Metals?
STRONG TRACK RECORD OF ACCRETIVE GROWTH EXPANSION & GROWTH THROUGH ACQUISITIONS 9.0 Total attributable gold equivalent R&R per 100 shares since inception 2,10 8.0 7.0 M&I 6.0 Gold Eq oz / 100 share P&P 5.0 4.0 Mined 3.0 2.0 1.0 0.0 -1.0 -2.0 -3.0 -4.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Significant growth in reserves and resources per share since inception 11 Who is Wheaton Precious Metals?
STRONG BALANCE SHEET AMPLE CAPACITY TO CONTINUE GROWING Balance Sheet 1,11 $3,000 $2,000 (million US$) $1,000 $0 Revolving Credit Facility Cash Remaining Capacity Est. Op. Cash Flow (2019-2023) Strong cash flow readily services debt and provides capacity for growth 12 Who is Wheaton Precious Metals?
RESOLUTION OF THE CANADIAN TAX DISPUTE REASSESSMENT FOR 2005-2010 SETTLED ON DECEMBER 13, 2018 ▪ Background 12 CRA reassessed Wheaton in September 2015 for tax years 2005-2010: • CRA’s position was that income earned by Wheaton’s foreign subsidiaries (Wheaton International) outside of Canada from mines located outside of Canada should be taxable in Canada on the basis of transfer pricing • Total potential liability for 2005 - 2017 was over US$1bn ▪ Settlement 12 Foreign income on earnings generated by Wheaton International will not be subject to tax in Canada 12 ▪ The service fee charged by Wheaton for the services provided to Wheaton International will be adjusted to include capital-raising costs and the mark-up will be increased from 20% to 30%. • This additional service fee will result in increased income generated by Wheaton in Canada that is subject to Canadian tax. ▪ The transfer pricing principles reached in the settlement principles will apply to taxation years after 2010 subject to there being no material change in facts or change in law or jurisprudence ▪ Total expenses of $29 million in respect of the 2005-2017 taxation years reflected in the Q4 2019 Statement of Earnings and includes a non-cash income tax expense of $16 million • Net cash expense of $13 million comprised of (i) $4 million of current income taxes; (ii) $4 million of interest and penalties; and (iii) $5 million of professional fees. The tax settlement resulted in less than $10 million in cash taxes & interest through 2017 13 Who is Wheaton Precious Metals?
Recommend
More recommend
